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Based in Singapore with customers in 35 countries that pay into 50+ countries, InstaReM is at the forefront of fintech innovation in Southeast Asia. The company’s co-founder and CEO Prajit Nanu chatted with me during a recent visit to Ripple HQ in San Francisco and shared valuable insights into financial inclusion efforts in the region, the need to improve remittance speed and costs, and why cross-border enterprise payments also demand innovation.
Promoting Financial Inclusion
Prajit is deeply committed to advancing financial inclusion worldwide and sees remittance innovation as an important part of that effort.
In our conversation, he put onus on the global payments industry to make remittance payments more affordable—citing an average of 7-8 percent in fees on remittances worldwide with even higher fees in some Southeast Asian markets where the need for affordable money transfers is the greatest.
To further illustrate his point, Prajit shared stories of InstaReM customers—people who send $400 of the $500 they earn every month back home, only to see it getting eaten up in hidden fees or used inappropriately. He wants to see the global financial players help build an ecosystem of companion products, including insurance, that can be used in tandem with remittances to improve financial stability.
Improving Speed and Cost of Remittance
For his part, Prajit is focused on helping InstaReM customers by reducing the cost and enhancing the speed of its remittance services. By improving both, InstaReM is able to deliver greater impact while also expanding its market share.
Prajit went on to explain that Ripple is a big part of this effort and an important partner to his team. For InstaReM, Ripple eliminates the need to prefund accounts in a number of countries, enabling real-time transactions at a fraction of the cost compared to the traditional methods.
Prajit acknowledged that a lack of liquidity is one of the biggest challenges for InstaReM. Its sheer size and distribution presents a problem in that they have pockets of pre-funded accounts around the world. Moving that money between markets takes time and costs money. With Ripple, InstaReM can minimize or eliminate this capital investment.
Cross-Border Enterprise Payments
Prajit pointed out that InstaReM serves enterprise customers as well as retail consumers. Importantly, he noted both customer segments present the same prefunding challenges to his business.
In particular, enterprise customers can issue transactions ranging from $10 to $30,000. The smaller amounts are harder because the cost relative to the size of the transaction is high. And using batch transactions to lower the cost creates a longer delay.
Through InstaReM’s use of Ripple in the Philippines and Mexico corridors, InstaReM has been able to eliminate prefunding requirements and now offers faster remittances at lower cost . This ability allows InstaReM’s enterprise and consumer clients to send any amount of money instantly without batching, increasing transaction volume overall.
FinTech Innovation in Southeast Asia
With 80 percent of the volume in digital asset trading coming from Asia, Prajit was quick to suggest that this region has an appetite for innovation and perhaps the greatest need for a better payments infrastructure.
He said Asian companies are focused on building wallet-based payment ecosystems. For instance, Go-Jek has built 20+ businesses around its Go-Pay wallet for everything from on-demand beauty services to telehealth. Prajit also pointed to upcoming innovations in the region:
- A single QR code for countries like Singapore, versus individual payment options and apps at checkout;
- Alipay advances, including wallet technologies that can be used to pay for everything from fast food to retail, as well as the sheer volume of loans it funds—more than 60 million.
Ultimately, Prajit is very excited about the pace of and prospects for innovation in Asia. He sees blockchain as being a key part of this, especially for its ability to make micro-transactions—loans, payments, remittance—much more efficient and transparent.
And in a region primed for advances in both consumer and enterprise remittances, he sees enormous opportunity for the use of Ripple’s solution to address issues of liquidity, speed of implementation, and the cost of capital. That success will lead to even greater and more impactful financial inclusion efforts.
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